Tile maker Asian Granito Ltd has chosen the contract manufacturing route to add capacity quickly, as demand for ceramic tiles is expected to firm up in 2013-14 after a muted growth this year.
The Ahmedabad-based firm is tying up with some 15 contract manufacturers to add a capacity of about 25,000 sq m per day in the next six months. It currently operates six manufacturing units with a combined output of 81,000 sq m a day in Gujarat.
“We are investing about Rs 300 crore for putting in place the network of contract manufacturers, including modernising their facilities,” A.P. Manoj Kumar, Vice-President (Sales and Marketing), told
Asian Granito is amongst the top seven or eight companies in this sector after H R Johnson, Kajaria, Nitco and Somani. The domestic tile market is estimated at Rs 18,000 crore, which registered a lower growth of about 11 per cent this year against 14-15 per cent in the previous fiscal.
Big markets
It sees demand rising as per capita consumption in India is 0.17 sq m against 7 sq m in China and the highest of 17 sq m in Saudi Arabia. It will consider setting up its seventh manufacturing unit in the South, either in Andhra Pradesh or Karnataka, depending on the availability of gas.
“Tamil Nadu is our biggest market, followed by Kerala and Andhra Pradesh. If we get adequate gas supply, we may consider setting up of a 9,000-sq-m a day unit at a cost of about Rs 70 crore in one of these two States,” Manoj Kumar said.
Transportation cost accounts for about 25 per cent of the product costs, which range from Rs 240 a sq m to Rs 3,400 a sq m.
“We revised our prices in December. We may have to do that again sometime in April as diesel prices increase,” he said.
Having a network of 23 outlets, Asian Granito intends to expand to 50 outlets by next fiscal and 100 the next year. It is also getting into new products such as sanitary and kitchen fittings.
amitmitra@thehindu.co.in